INFOSYS 2017-18 Annual Report Analysis

Sat, 31 Mar

INFOSYS has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

INFOSYS Income Statement Analysis

• Operating income during the year rose 3.0% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.6% YoY during the fiscal. Operating profit margins witnessed a fall and down at 26.8% in FY18 as against 26.6% in FY17.
• Depreciation charges increased by 9.4% increased by 0.0% YoY, respectively.
• Other income declined by 3.7% YoY.
• Net profit for the year grew by 11.9% YoY.
• Net profit margins during the year grew from 21.0% in FY17 to 22.8% in FY18.

INFOSYS Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	684,840	705,220	3.0%
Other income	Rs m	34,390	33,110	-3.7%
Total Revenues	Rs m	719,230	738,330	2.7%
Gross profit	Rs m	182,450	188,930	3.6%
Depreciation	Rs m	17,030	18,630	9.4%
Interest	Rs m	0	0	0.0%
Profit before tax	Rs m	199,810	203,410	1.8%
Tax	Rs m	55,980	42,410	-24.2%
Profit after tax	Rs m	143,830	161,000	11.9%
Gross profit margin	%	26.6	26.8
Effective tax rate	%	28.0	20.8
Net profit margin	%	21.0	22.8

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INFOSYS Balance Sheet Analysis

• The company's current liabilities during FY18 stood at Rs 141 billion as compared to Rs 140 billion in FY17, thereby witnessing an increase of 0.7%.
• Current assets fell 7% and stood at Rs 500 billion, while fixed assets fell 2% and stood at Rs 286 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 786 billion as against Rs 828 billion during FY17, thereby witnessing a fall of 5%.

INFOSYS Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	688,620	647,930	-5.9
Current Liabilities	Rs m	140,130	141,050	0.7
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	828,150	786,080	-5.1
Current assets	Rs m	537,050	500,170	-6.9
Fixed Assets	Rs m	291,100	285,910	-1.8
Total Assets	Rs m	828,150	786,080	-5.1

INFOSYS Cash Flow Statement Analysis

• INFOSYS's cash flow from operating activities (CFO) during FY18 stood at Rs 132 billion, an improvement of 14.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs 45 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -205 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -28 billion from the Rs -101 billion net cash flows seen during FY17.

INFOSYS Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	115,310	132,180	14.6%
Cash Flow from Investing Activities	Rs m	-145,420	44,520	-
Cash Flow from Financing Activities	Rs m	-69,390	-205,050	-
Net Cash Flow	Rs m	-100,720	-27,540	-

Current Valuations for INFOSYS

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 74.1, an improvement from the EPS of Rs 62.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,134.4, stands at 29.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.5 times, while the price to sales ratio stands at 3.2 times.
• The company's price to cash flow (P/CF) ratio stood at 12.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	299.6	324.5
TTM Earnings per share	Rs	62.9	74.1
Diluted earnings per share	Rs	34.2	38.3
Price to Cash Flow	x	26.7	12.6
TTM P/E ratio	x	29.9	29.6
Price / Book Value ratio	x	3.6	3.5
Market Cap	Rs m	2,489,421	2,261,875
Dividends per share (Unadj.)	Rs	25.8	43.5

Ratio Analysis for INFOSYS

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.5x during FY18, from 3.8x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 24.8% during FY18, from 20.9% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 31.4% during FY18, from 29.0% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 20.5% during FY18, from 17.4% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	3.8	3.5
Debtors’ Days	Days	7	7
Interest coverage	x	0.0	0.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	17.4	20.5
Return on equity	%	20.9	24.8
Return on capital employed	%	29.0	31.4

To see how INFOSYS has performed over the last 5 years, please visit here.

INFOSYS Share Price Performance

Over the last one year, INFOSYS share price has moved up from Rs 1,020.8 to Rs 1,134.4, registering a gain of Rs 113.6 or around 11.1%.

Meanwhile, the S&P BSE IT Index is trading at Rs 12,100.6 (down 0.3%). Over the last one year it has moved up from 10,365.5 to 12,100.6, a gain of 1,735 points (up 16.7%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for INFOSYS and quarterly results for INFOSYS)

Read: Latest Annual Report Analysis of INFOSYS